The monthly growth rate is a critical metric for startups, especially those in the SaaS (Software as a Service) industry. It gives entrepreneurs an idea of how quickly their company is expanding and provides insight into the potential for future success. But what is considered a good MGR for SaaS startups? Let’s take a closer look.
Average Monthly Growth Rate
According to a study by Bessemer Venture Partners, the average monthly growth rate for successful SaaS startups is 7-8%. This means that a company’s revenue is increasing by 7-8% each month. However, it’s important to keep in mind that this is just an average and the ideal growth rate can vary based on a number of factors, including the size of the company and the industry it operates in.
Factors to Consider
Company Size
The size of the company can have a significant impact on its monthly growth rate. Smaller startups may experience higher growth rates as they are still in the early stages of scaling their business. On the other hand, larger companies may experience slower growth rates due to the challenge of maintaining their current customer base while trying to expand into new markets.
Industry
The SaaS industry is highly competitive, with new companies entering the market regularly. The ideal monthly growth rate for a SaaS startup can vary based on the specific niche the company operates in. For example, a company specializing in enterprise software may have a lower growth rate compared to a company specializing in a new, rapidly growing market.
Investment
The amount of investment a company has received can also impact its monthly growth rate. Startups with more funding can invest in marketing and sales efforts, which can drive growth. On the other hand, startups with limited funding may struggle to achieve significant growth without adequate resources.
Real-Life Examples
Slack:
Slack is a popular workplace communication tool that has experienced incredible growth since its launch in 2013. The company’s monthly growth rate has averaged around 10% since its inception, which is significantly higher than the average for successful SaaS startups. Slack’s focus on a growing market, strong product-market fit, and investment in marketing and sales efforts have contributed to its success.
Hubspot:
Hubspot is a leading inbound marketing and sales platform that has been growing steadily since its launch in 2006. The company’s monthly growth rate has averaged around 6-7% since its inception, which is in line with the average for successful SaaS startups. Hubspot’s focus on providing valuable marketing and sales solutions to its customers has helped it achieve consistent growth.
Conclusion
In conclusion, a good growth rate (m) for SaaS startups is around 7-8%. However, the ideal growth rate can vary based on factors such as company size, industry, and investment. Companies like Slack and Hubspot provide great examples of what is possible with the right combination of market focus, product-market fit, and investment.
It’s essential for entrepreneurs to keep track of their growth rate to gauge the success of their company and identify areas for improvement. With Radix, you can easily monitor your monthly growth rate and gain valuable insights into your company’s performance. So why wait?
Start tracking your growth rate with Radix today and take control of your company’s success.
